Palantir Plunges 7.77% To $119.91 Amid Technical Breakdown Below Key $125 Support

Palantir shares declined 7.77% in the latest session to close at $119.91, extending a two-day decline totaling 9.96% amid heightened trading volume of 130.5 million shares. This sharp pullback from the recent peak of $135.28 warrants a multifaceted technical assessment.
Candlestick Theory
The recent price action reveals critical patterns. The June 3 session formed a bearish shooting star, with a high of $135.28 and close at $133.17, signaling rejection at the $135 resistance level. This was confirmed by consecutive long red candles on June 4-5, which sliced through the $125-$126 support zone. The breakdown establishes $118.93-$120 as immediate support, while the $130-$135 region now acts as formidable resistance. A bearish continuation pattern is evident unless Palantir reclaims $125.
Moving Average Theory
The 50-day moving average (approximately $124) was decisively breached during the selloff, turning the short-term trend bearish. However, the 100-day moving average (near $110) remains intact, preserving the intermediate-term bullish structure. The convergence of these averages suggests consolidation pressure, with the price now trading between dynamic resistance at $124 and support at $110. A sustained break below the 100-day MA would signal trend deterioration.
MACD & KDJ Indicators
The MACD histogram has turned negative after a bearish crossover, with the signal line dominating the MACD line – a classic momentum reversal sign. Concurrently, the KDJ indicator shows the %K line plunging below %D from overbought territory (>80) after failing near $135. This dual momentum deterioration aligns with the candlestick breakdown. Notably, both oscillators are accelerating downward without divergence, suggesting no immediate reversal signal.
Bollinger Bands
Volatility expanded dramatically during the decline, with the price breaking below the lower Bollinger Band ($121 est.). This two-standard-deviation move typically indicates oversold conditions but also reflects intense selling pressure. The band width expansion suggests trend continuation potential. A mean-reversion bounce toward the 20-day moving average (~$127) is statistically probable, though sustained sub-$121 trading would signify exceptional weakness.
Volume-Price Relationship
The selloff was validated by surging volume, with June 5's 130.5 million shares marking the highest volume in three weeks. Distribution was evident as the 7.73% surge on May 30 (185.9M shares) was reversed by higher-volume declines. This volume profile confirms institutional participation in the downturn. Any recovery attempt will require volume expansion to confirm sustainability.
Relative Strength Index (RSI)
The 14-day RSI (approximately 41) has retreated sharply from near-overbought levels (>70) but remains above oversold territory. This indicates room for further downside, though the speed of descent (from 70 to 41 in two sessions) creates conditions for a technical bounce. Historically, Palantir's RSI has rebounded reliably near 35 during this cycle, making that level a potential inflection point.
Fibonacci Retracement
The 23.6% retracement level ($121.60) of the April-June rally (from $77.32 to $135.28) was violated during the decline. This level now reverses to resistance, with the 38.2% retracement ($113.14) emerging as the next technical target. Confluence exists at $115 – aligning with the 38.2% Fib, the May 12 low of $115.01, and the 100-day MA – suggesting a high-probability stabilization zone if the decline extends.
Confluence & Divergence Observations
Multiple indicators concur on bearish near-term momentum: The MACD/KDJ crossovers, volume-backed breakdown below $125, and Fib/pivot point violation show unified signals. No significant bullish divergences are detected. However, Bollinger Band oversold conditions and RSI trajectory suggest heightened rebound risk near $115. The key technical conflict lies between intermediate support ($110-$115 confluence zone) and bearish momentum structure, implying either a technical bounce or further consolidation before recovery attempts.